Financial Markets… U.S. equities extended their gains ahead of a U.S. Federal Reserve’s policy meeting today, with the S&P 500 index reaching a fresh record high, as weaker retail sales and consumer confidence data added to speculations the Federal Reserve will maintain its bond purchasing program for the time being. Although some investors remain cautious about potential surprises from the Fed’s two-day policy meeting, most see the Fed’s tapering move could be delayed well into next year. The S&P 500 advanced 0.5% in morning session, while the Dow Jones Industrial Average rose 0.3%.

Oil price weakened for the first time in four days as estimated U.S. crude inventory jumped to a four-month high last week. Crude stockpiles in the U.S. rose by 2.35 million barrels to 382.1 million barrels last week according to the survey. West Texas Intermediate for December settlement fell 0.5% to $98.23 a barrel in New York, while Brent for December delivery slid 0.55 to $109.07a barrel in London.

High Income Economies…U.S. retail sales unexpectedly fell 0.1% (m/m sa) in September following a 0.2% increase in August. Largely driving the decline was a 2.2% decrease in sales by motor vehicle & parts dealers, which grew 0.7% in August. Excluding auto sales, retail sales actually rose 0.4% in September compared to a 0.1% uptick in August. The increase in retail sales excluding auto sales reflected a 1.0% increase in sales at grocery stores, a 0.9% increase in sales at restaurants & bars and a 0.7% increase in sales at electronics & appliance stores. On a three-monthly annualized basis, total retail sales grew 4.5% (3m/3m saar) in September and 5.7% in August, while ex-auto sales increased 4.1% in September and 3.1% in August.

Amid Prime Minister Mariano Rajoy’s various measures to ease the debt burden, Spain's total government deficit declined 3.6% of GDP in September from 3.9% in August.

According to the National Institute of Statistics and Economic Studies (Insee), French consumer confidence stagnated at a low level of 85 in October, which was unchanged from September and well below the long-term average reading of 100. Consumers' assessment of their ability to make significant purchases and savings in the future improved, but assessment of their recent financial situation deteriorated. In addition, fears of rising unemployment diminished and perceptions regarding the quality of life improved in October.

Chilean retail sales rose 7% (y/y) in September after a 12% drop in August. Vehicle sales jumped 16.2%, while domestic equipment rose 11.4%. At the same time, Chile’s manufacturing output continued to fall, dropping 1% (y/y) after a 2% contraction in August. The decline was mainly due to a slide in the production of iron and steel products used in construction, reinforcing views that the economy of the top copper exporter is slowing.

Developing Economies…East Asia and Pacific: China’s central bank injected liquidity in the economy today for the first time since mid-October. The provided cash, in the amount of Rmb13bn, helped ease worries that the Chinese authorities were about to tighten monetary policy and boosted the money market where the weighted average seven-day repo rate fell 1 basis point to 4.99 percent and the overnight repo rate decreased 3 basis points to 4.52%. China’s central also raised the rate on the cash provided to the market, setting the rate for its seven-day bond reverse repurchase agreements at 4.1%, 20 basis points higher than the 3.9% rate offered at all auctions since mid-August.

Europe and Central Asia: Hungary’s unemployment rate fell for the sixth straight month in September. In the three-month ended in September the unemployment rate stood at 9.8% compared with 9.9% recorded in the previous month and 10.4% at the end of the third quarter in 2012.

Meanwhile, Hungary’s central bank cut its benchmark policy rate for the fifteenth consecutive time in October to help boost economic growth as inflationary pressures remain subdue. The central bank base rate was reduced by 20 basis points to 3.40 with effect from October 30, 2013. The central bank has cut the interest rate every month since August 2012 when the rate stood at 6.75 %.

South Asia: India’s central bank raised its key lending rate in October to help fight inflation. The repo rate, which is the rate at which the central bank lends to banks, was raised by 25 basis points to 7.75%. At the same time, the reverse repo rate, which is the rate at which the central bank accepts deposits from banks, was adjusted to 6.75% from 6.50%; the marginal standing facility, which is the rate at which scheduled banks borrow from the central bank, was lowered by 25 basis points to 8.75%; and the bank rate was also lowered by 25 basis points to 8.75%. Left unchanged was the cash reserve ratio, which remained at 4%.

Sub-Saharan Africa: South Africa’s unemployment rate fell to 24.7% in the September quarter from 25.6% in the second quarter and from 25.5% in the third quarter of 2012. The number of employed persons increased by about 308,000 (q/q) to about 14 million in the third quarter, reaching the pre-recession peak level at the end of 2008. The labor force participation rate was recorded at 55.7%, up from the 55.3% recorded in the previous quarter.

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